Effectiveness of Special Economic Zones as a Strategy for Economic Development in Sri Lanka

Abstract

Economic development is the ultimate destination of human civilization commenced with subsistence agriculture to globally industrialized output, served with artificial intelligence-based services, for the purpose of enhancing standards of living. Uneven distribution of resources in the globe was mapped with an economic intention as in the form of investments to accomplish desired economic development goals in given geographical boundaries without claiming against the natural realities. Nations, governments, and business partners designed deliberate gatherings with respect to clearly defined boundaries as various forms of zones to undertake economic, socio cultural, technological and political paradigms in the long run. The main objectives of the article is to evaluate the effectiveness of special economic zones as a strategy for economic development in Sri Lanka. In addition, it is expected to explore the evolution and scattering of special economic zones in the Asia, to identify the role of special economic zones in Sri Lanka and to investigate challenges and prospects of promoting special economic zones in Sri Lanka. The study is purely based on secondary data and qualitative analytical approach is used to derive conclusions. Investment attempts by Sri Lanka after trade liberalization broaden the scope of industrialization as it led towards novel experience to both production and consumption while making sensible structural changes. Export Processing Zones transferred villages to cities not only adding value to the gross domestic product but also to human lives. The portfolio of especial economic zones of Sri Lanka was expanded with the time but within limited scope of operation. Corruptions, delays, cost inefficiencies and policy mismatch are key challenges for Sri Lanka to overwhelm, in order to attract foreign direct investments. However unmatchable locational advantage, resource endowment, literacy as well as upcoming investment zones like Port-City are the core prospects to position demand for foreign direct investments in the region.